Bunnings’ ambitions are “this big”.
DO BRITISH people like sausage sizzles? Can you even have a Bunnings without a sausage sizzle?
We are about to get answers to these questions. Bunnings is plotting a takeover of a chain of UK hardware stores and will soon open across Britain.
After years as the undisputed champion of Australia, Bunnings is taking a big risk. It could become the Masters of the UK — the import brand nobody wants.
Bunnings might flop in a nation where people are more likely to rent flats, backyards are too small to have a shed and it is too cold and rainy to fix up your house on the weekend anyway.
Bunnings’ parent company Wesfarmers will be spending $700 million on the expansion. If things go horribly wrong, Wesfarmers will suffer.
Outstanding growth from Coles and Bunnings means a fresh round of pain for Woolworths.
This is terrific.
Will the Bunnings’ sausage sizzle spread around the world?Source:Supplied
Businesses don’t take enough risks. CEOs rarely put their jobs on the line. Why would they? They can make millions just slowly growing the business a few per cent per year, without making waves.
What Australian needs is not more CEOs whose idea of risk is to open a new shop in Parramatta. We need world-beaters.
We have exported a few brands the world has loved — like Ugg boots and Fosters beer. But there are some things we love that foreigners won’t touch. Like Vegemite. Who knows which type Bunnings will be? But we need businesses to at least try.
Australia is under an onslaught of global retail brands. Aldi, H&M, TopShop and Zara.
All these brands have come here and been amazing. But if it is all one-way traffic, we could end up without any big retail brands of our own.
The most recent statistics on foreign direct investment show foreign companies’ net investment in Australia is around $60 billion a year. Meanwhile, Australian net foreign direct investment is around zero.
The numbers tell all.Source:Supplied
The falling Aussie dollar raises the stakes for business investing abroad.
At the time of writing the dollar just hit its lowest level in seven years. With a lower dollar, the risk of foreign investment rises — everything a company does overseas becomes more expensive. But, the pay-off to success increases. Profits made get turned back into Aussie dollars at higher and higher rates.
Courage has never been more important. Not just for the company in question but for the country.
Being the HQ for a global company means economic activity and jobs. Australia is home to a few truly global companies.
But many of our big companies are focused on Australia with perhaps a bit of New Zealand thrown in if they’re bold. Commonwealth Bank for example, or Coles and Woolworths.
That seems like the low risk move in the short run. But it leaves a lot of opportunities untouched, and means those big local companies are more at risk if the Australian economy dips. A company with operations all over the world, however, can endure when times are tough at home, and support local jobs.
So good luck to Bunnings. Bunnings has been in WA since 1886, but it has been a national chain owned by Wesfarmers since the early 1990s. You could say it is in its mid-twenties. A classic time for a young person to move to London, spread their wings and take a few risks.
If everything goes well in Bunnings’ Battle of Britain, who knows where is next.
Perhaps one day those sausage sizzles will be famous all over the world.
Jason Murphy is an economist. He publishes the blog Thomas The Thinkengine. Follow him on Twitter
@jasemurphy.
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